banking

Our lawless Tea-Publican legislature opens the door to predatory lenders again

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In 2008, the voters of Arizona defeated Prop. 200, a ballot measure from former state senator and lobbyist Jonathan “Payday” Paton and the predatory lending industry to extend the state authorization for payday loans in Arizona.

This did not end predatory lending in Arizona, however. The payday loan centers quickly converted to auto title loan centers, something still authorized under Arizona law. The predatory lending industry has tried several times since 2008 to revive certain forms of predatory lending in Arizona, but each time they have been thwarted — until now.

Tea-Publicans in the House narrowly approved a strike everything amendment to SB 1316 (.pdf) on Monday, authorizing high interest predatory flex loans.  Arizona House approves 204-percent ‘flex’ loans.

Laurie Roberts of The Republic writes, Roberts: House throws poor Arizonans to the sharks:

youre-going-to-need-a-bigger-boatNever again let it be said that our leaders don’t care about Arizona’s struggling families.

Or at least, the ungodly profits to be made off of them.

The Republican-controlled House on Monday approved Senate Bill 1316, allowing the payday loan industry to come into Arizona and offer “flex loans” with interest rates of up to 204 percent.

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Joseph Stiglitz on the Great Malaise

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Overnight this happened again. China Halts Stock Trading After 7% Rout Triggers Circuit Breaker:

ChinaStockThe worst-ever start to a year for Chinese shares triggered a trading halt in more than $7 trillion of equities, futures and options, putting the nation’s new market circuit breakers to the test on their first day.

Trading was halted at about 1:34 p.m. local time on Monday after the CSI 300 Index dropped 7 percent. An earlier 15-minute suspension at the 5 percent level failed to stop the retreat, with shares extending losses as soon as the market re-opened. Traders said the halts took effect as anticipated without any major technical problems.

The world’s second-largest stock market began the year on a down note after data showed manufacturing contracted for a fifth straight month and investors speculated that the end of a ban on share sales by major stakeholders may come as soon as this week. Chinese policy makers, who went to unprecedented lengths to prop up stock prices during a summer rout, are trying to prevent financial-market volatility from weighing on economy set to grow at its weakest annual pace since 1990.

This caused jitters in markets around the world. U.S. Stocks Tumble After Selloff in China Renews Growth Concern:

U.S. stocks tumbled to begin 2016, with the Standard & Poor’s 500 Index off to its worst start in 15 years as a rout in Chinese equities renewed concern that an economic slowdown there will damp global growth.

Investors returning to the market after the New Year holiday faced a worldwide selloff sparked by weak factory data in China, while a reading that showed the fastest contraction in U.S. manufacturing in six years bolstered anxiety that slowing growth in the world’s second-largest economy is spreading. A flareup in tension between Saudi Arabia and Iran added to the unease.

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Greece capitulates to its creditors demands, loses its sovereignty

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euroA week ago Sunday, the citizens of Greece gave a resounding “no” vote to the proposed bailout package from its European Union creditors.

By Thursday, when the government of Greece had to put its final offer on the table to avoid bankruptcy, the government capitulated to its creditors. In Greece, defiance dissipates into capitulation.

But even this was not good enough for  Greece’s creditors, they demanded even more. Germany doesn’t want to save Greece. It seems to want to humiliate Greece.

The Sunday deadline for a deal was extended into early Monday morning, and Greece accepted an aspirational deal that requires its parliament to accept harsh constraints this week before its European union creditors will consider extending a bailout package. This is not a completed deal. The New York Times reports, European Leaders Reach Deal on Greek Debt Crisis:

Greece agreed to a deal with its European creditors on Monday after long and bitter negotiations, swallowing substantial new concessions in the face of imminent financial collapse and insistent demands from Germany and other countries that it prove it was worthy of a third bailout in five years.

The agreement, announced after a contentious all-night session among leaders of the 19 nations that use the European common currency, requires Greece to move quickly to adopt a host of economic policy changes and to allow close monitoring by Europe and the International Monetary Fund.

If Prime Minister Alexis Tsipras can push the central elements of the package through his Parliament in the coming days — a political challenge likely to prove difficult — the creditors said they would be willing to open negotiations on providing as much as 86 billion euros, or $96 billion, to keep Greece afloat for the next three years, and to consider proposals to ease repayment terms on much of Greece’s existing debt of more than €300 billion.

The creditors also agreed, once terms of the bailout are settled, to pull together a short-term stimulus program of up to €30 billion to help Greece’s ravaged economy.

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Global economic news goes from bad to worse

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I’m sure this is totally unrelated to what is going on in China and the EU . . . this allegedly was not a “cyber attack,” but just a “technical issue.” New York Stock Exchange Ends Hours-Long Shutdown:

economy 1Trading on the New York Stock Exchange was shut down for hours on Wednesday as the exchange tried to cope with what appeared to be a technical glitch, rather than an attack.

It was the longest such suspension of trading at the exchange in recent years, although trading in the stocks listed on the N.Y.S.E. was able to continue on other stock exchanges, like Nasdaq.

Trading resumed late Wednesday afternoon, almost four hours after the shutdown began, less than an hour before the 4 p.m. closing bell.

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The shutdown was especially troubling because it came only hours after United Airlines temporarily grounded all of its flights following a technical issue. Other businesses had problems with their websites.

But both United and the New York Stock Exchange were adamant that the problems were a result of internal technical problems, rather than malicious hackers.

I’ll bet China’s government is wondering, “Why didn’t we think of this?” as the government’s direct intervention in its stock market has failed to stop the mass sell-off. Beijing’s Moves Fail to Stem Sharp Slide in China’s Stocks:

Stock prices in mainland China fell sharply again on Wednesday, despite another series of government measures meant to restore confidence and stabilize a market that has grown increasingly turbulent in the last month.

The sell-off is putting pressure on the government to take swift action, as losses pile up for the millions of ordinary investors that piled into the market. Just days after Beijing introduced a number of bold measures to prop up share prices, regulators announced new initiatives Wednesday, including allowing insurers to invest more money in stocks and creating a fund to buy up shares in small and midsize companies.

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China moves to prevent a stock market crash

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China’s stock market has been in a free fall since mid-June, even after recent government moves to prop up the market by easing margin trading rules for the benefit  of speculators in what has become China’s version of “casino capitalism,” the same gambler’s disease that caused the Wall Street crash in 2008.

CNN Money reports, China spends billions to prevent stock market crash:

YUAN-web-masterChina’s stock market is in trouble. It’s down over 20% since mid-June.

But Chinese stock brokers are trying to tell scared investors: Stop selling. Help is on the way.

On Saturday, China’s 21 largest brokerage firms said they would spend a whopping 120 billion yuan (about $19.3 billion) to try to stabilize the market, according to Chinese state media. The firms will actually buy stock funds themselves.

The goal is to show regular mom and pop investors that the big players still think buying stocks is a good idea. It’s a similar strategy to companies buying back their stock when they think it’s undervalued.

Big stock slide: The Shanghai Composite — the world’s third largest stock exchange if you add up the value of its companies — has lost 24% since June 12, putting it officially in bear market territory. The bears are growling even louder on the smaller Shenzhen Composite, down roughly 30% in the same period.

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